VAT and LODs

A bit confused as to how VAT (Vertex Animation) works with LODs. If you have a character with 3 LOD levels defined does that mean you sill need 3 different sets of VAT textures for it to work properly?

Depends on how you are using VAT. For example, if you are storing the pos and rot textures per vertex, you would need different textures per lod. However, you could store the pos and vertex of rigid bodies for example, and map the verts to these positions. This approach would leverage the same textures for all LOD.